| 133067 | REPORT | N | N | MAIN | ACTION | REFERRED | N | Implementation of a Commercial Parking Levy | 2024.EX12.3 | Y | Y | Y | Y | <p>The Chief Financial Officer and Treasurer recommends that:</p>
<p> </p>
<p>1. City Council endorse the overall Guiding Design Principles outlined in Attachment 2 of this report to outline initial parameters, and be leveraged for the purposes of consultation, in advance of implementation of a commercial parking levy in 2025.</p>
<p> </p>
<p>2. City Council authorize the Chief Financial Officer and Treasurer, as required, to procure third-party support to conduct a comprehensive parking inventory in 2024 and enter into any necessary agreements with such third parties, and to authorize a one-time withdrawal from the Tax Rate Stabilization Reserve Fund within the 2024 Operating Budget for Non-Program to fund the associated costs, with an equivalent amount to be replenished from future revenues generated by the commercial parking levy, subject to implementation.</p>
<p> </p>
<p>3. City Council direct the Chief Financial Officer and Treasurer to conduct further stakeholder engagement to identify impacts to commercial businesses, and to procure third-party resources as required, to support the engagement and enter into any necessary agreements with such third parties.</p>
<p> </p>
<p>4. City Council direct the Chief Financial Officer and Treasurer to report back prior to the 2025 Budget Process with an update and final tax design recommendations following the completion of the parking inventory and stakeholder engagement, referenced above, for implementation in 2025.</p> | <p>The introduction of a commercial parking levy was proposed in the context of the City’s Updated Long-Term Financial Plan, which identified opportunities to address the significant and unprecedented financial challenges the City faces over the next 10 years. Overall, the total annual revenue potential of a commercial parking levy is approximately $100 million - $150 million, based on the considerations discussed below, including estimated parking area in the City of Toronto and application of a two-tiered rate structure for the levy. Estimates will continue to be refined as the comprehensive parking inventory is completed.</p>
<p> </p>
<p>Estimated Parking Spaces</p>
<p> </p>
<p>The estimated annual revenues of a parking levy cannot be verified until the City conducts a comprehensive parking inventory which will be completed throughout 2024. As a preliminary estimate, staff are using the data referenced in Table 1 below, which indicates the City has approximately one million commercial parking spaces in total.</p>
<p> </p>
<p>This analysis leverages a 2016 KPMG revenue tools study which was informed by geographic estimates developed by Metrolinx in 2013. The data for the Toronto Parking Authority (TPA) and Toronto Transit Commission (TTC) have been updated to reflect more current estimates. The table also converts the number of spaces to estimated parking area in square metres, as the commercial parking levy is recommended to be imposed on a per square metre basis At this time, staff are unable to respond to Council’s request for an estimate of the current number of commercial, paid and unpaid parking spaces in the City of Toronto broken down by ward and will be conducting a parking inventory to obtain accurate up-to-date information.</p>
<p> </p>
<p>For the purpose of this analysis, it is assumed that one parking space is equivalent to 30 square metres. A typical parking space in Toronto may range from 15 to 20 square metres however this does not account for driveways, access lanes and ramps. An areal measure of 30 square metres accounts for this and is the same size used in the Montreal parking levy model. This analysis is purely for the purposes of determining the approximate square metres used for commercial parking which would be subject to the recommended commercial parking levy.</p>
<p> </p>
<p>Table 1: Preliminary Estimate of Number of Spaces and Estimated Parking Area</p>
<p> </p>
<table style="width: 474.65pt; border-collapse: collapse; border: none;" width="633">
<thead>
<tr style="height: 1.0pt;">
<td style="width: 254.9pt; border: solid black 1.0pt; background: #DEEAF6; padding: 5.75pt 5.75pt 5.75pt 5.75pt; height: 1.0pt;" width="340">
<p style="text-align: center;"><strong><span style="color: black;">Type</span></strong></p>
</td>
<td style="width: 106.35pt; border: solid black 1.0pt; border-left: none; background: #DEEAF6; padding: 5.75pt 5.75pt 5.75pt 5.75pt; height: 1.0pt;" width="142">
<p style="text-align: center;"><strong><span style="color: black;">Number of Parking Spaces</span></strong></p>
</td>
<td style="width: 4.0cm; border: solid black 1.0pt; border-left: none; background: #DEEAF6; padding: 5.75pt 5.75pt 5.75pt 5.75pt; height: 1.0pt;" width="151">
<p style="text-align: center;"><strong><span style="color: black;">Estimated Parking Area (m</span></strong><strong><span style="color: black;">²</span><span style="color: black;">)</span></strong></p>
</td>
</tr>
</thead>
<tbody>
<tr style="height: 1.15pt;">
<td style="width: 254.9pt; border: solid black 1.0pt; border-top: none; padding: 5.75pt 5.75pt 5.75pt 5.75pt; height: 1.15pt;" width="340">
<p>TPA-off street</p>
</td>
<td style="width: 106.35pt; border-top: none; border-left: none; border-bottom: solid black 1.0pt; border-right: solid black 1.0pt; padding: 5.75pt 5.75pt 5.75pt 5.75pt; height: 1.15pt;" width="142">
<p style="text-align: right;">21,300</p>
</td>
<td style="width: 4.0cm; border-top: none; border-left: none; border-bottom: solid black 1.0pt; border-right: solid black 1.0pt; padding: 5.75pt 5.75pt 5.75pt 5.75pt; height: 1.15pt;" width="151">
<p style="text-align: right;">639,000</p>
</td>
</tr>
<tr style="height: 1.0pt;">
<td style="width: 254.9pt; border: solid black 1.0pt; border-top: none; padding: 5.75pt 5.75pt 5.75pt 5.75pt; height: 1.0pt;" width="340">
<p>TTC</p>
</td>
<td style="width: 106.35pt; border-top: none; border-left: none; border-bottom: solid black 1.0pt; border-right: solid black 1.0pt; padding: 5.75pt 5.75pt 5.75pt 5.75pt; height: 1.0pt;" width="142">
<p style="text-align: right;">11,500</p>
</td>
<td style="width: 4.0cm; border-top: none; border-left: none; border-bottom: solid black 1.0pt; border-right: solid black 1.0pt; padding: 5.75pt 5.75pt 5.75pt 5.75pt; height: 1.0pt;" width="151">
<p style="text-align: right;">345,000</p>
</td>
</tr>
<tr style="height: 1.0pt;">
<td style="width: 254.9pt; border: solid black 1.0pt; border-top: none; padding: 5.75pt 5.75pt 5.75pt 5.75pt; height: 1.0pt;" width="340">
<p>Commercial</p>
</td>
<td style="width: 106.35pt; border-top: none; border-left: none; border-bottom: solid black 1.0pt; border-right: solid black 1.0pt; padding: 5.75pt 5.75pt 5.75pt 5.75pt; height: 1.0pt;" width="142">
<p style="text-align: right;">100,000</p>
</td>
<td style="width: 4.0cm; border-top: none; border-left: none; border-bottom: solid black 1.0pt; border-right: solid black 1.0pt; padding: 5.75pt 5.75pt 5.75pt 5.75pt; height: 1.0pt;" width="151">
<p style="text-align: right;">3,000,000</p>
</td>
</tr>
<tr style="height: 1.0pt;">
<td style="width: 254.9pt; border: solid black 1.0pt; border-top: none; padding: 5.75pt 5.75pt 5.75pt 5.75pt; height: 1.0pt;" width="340">
<p>Destination based (e.g., zoo, racetrack)</p>
</td>
<td style="width: 106.35pt; border-top: none; border-left: none; border-bottom: solid black 1.0pt; border-right: solid black 1.0pt; padding: 5.75pt 5.75pt 5.75pt 5.75pt; height: 1.0pt;" width="142">
<p style="text-align: right;">20,000</p>
</td>
<td style="width: 4.0cm; border-top: none; border-left: none; border-bottom: solid black 1.0pt; border-right: solid black 1.0pt; padding: 5.75pt 5.75pt 5.75pt 5.75pt; height: 1.0pt;" width="151">
<p style="text-align: right;">600,000</p>
</td>
</tr>
<tr style="height: 1.0pt;">
<td style="width: 254.9pt; border: solid black 1.0pt; border-top: none; padding: 5.75pt 5.75pt 5.75pt 5.75pt; height: 1.0pt;" width="340">
<p><strong>Total Paid Spaces</strong></p>
</td>
<td style="width: 106.35pt; border-top: none; border-left: none; border-bottom: solid black 1.0pt; border-right: solid black 1.0pt; padding: 5.75pt 5.75pt 5.75pt 5.75pt; height: 1.0pt;" width="142">
<p style="text-align: right;"><strong>152,800</strong></p>
</td>
<td style="width: 4.0cm; border-top: none; border-left: none; border-bottom: solid black 1.0pt; border-right: solid black 1.0pt; padding: 5.75pt 5.75pt 5.75pt 5.75pt; height: 1.0pt;" width="151">
<p style="text-align: right;"><strong>4,584,000</strong></p>
</td>
</tr>
<tr style="height: 1.0pt;">
<td style="width: 254.9pt; border: solid black 1.0pt; border-top: none; padding: 5.75pt 5.75pt 5.75pt 5.75pt; height: 1.0pt;" width="340">
<p><strong>Total Unpaid</strong></p>
</td>
<td style="width: 106.35pt; border-top: none; border-left: none; border-bottom: solid black 1.0pt; border-right: solid black 1.0pt; padding: 5.75pt 5.75pt 5.75pt 5.75pt; height: 1.0pt;" width="142">
<p style="text-align: right;"><strong>855,000</strong></p>
</td>
<td style="width: 4.0cm; border-top: none; border-left: none; border-bottom: solid black 1.0pt; border-right: solid black 1.0pt; padding: 5.75pt 5.75pt 5.75pt 5.75pt; height: 1.0pt;" width="151">
<p style="text-align: right;"><strong>25,650,000</strong></p>
</td>
</tr>
<tr style="height: 1.0pt;">
<td style="width: 254.9pt; border: solid black 1.0pt; border-top: none; background: #D9D9D9; padding: 5.75pt 5.75pt 5.75pt 5.75pt; height: 1.0pt;" width="340">
<p><strong>Total (Paid and Unpaid)</strong></p>
</td>
<td style="width: 106.35pt; border-top: none; border-left: none; border-bottom: solid black 1.0pt; border-right: solid black 1.0pt; background: #D9D9D9; padding: 5.75pt 5.75pt 5.75pt 5.75pt; height: 1.0pt;" width="142">
<p style="text-align: right;"><strong>1,007,800</strong></p>
</td>
<td style="width: 4.0cm; border-top: none; border-left: none; border-bottom: solid black 1.0pt; border-right: solid black 1.0pt; background: #D9D9D9; padding: 5.75pt 5.75pt 5.75pt 5.75pt; height: 1.0pt;" width="151">
<p style="text-align: right;"><strong>30,234,000</strong></p>
</td>
</tr>
</tbody>
</table>
<p> </p>
<p>Application of a Two-Tiered Rate Structure</p>
<p> </p>
<p>Staff are recommending the application of a two-zone rate structure based on geographic area, in recognition of alternative travel modes available in the downtown area which help to manage congestion, improve travel times and positively impact climate action, and of the relative cost of parking and impacts on businesses. Generally, paid parking facilities charge more per hour in the downtown area due to high parking demand. In addition, the current assessed value of commercial properties located downtown is higher than comparable properties in surrounding areas. Furthermore, the application of a tiered rate avoids a flat commercial parking levy that would have had a proportionately greater impact on commercial businesses located outside of the downtown area.</p>
<p> </p>
<p>Figure 1 later in the report provides a Zone Map which corresponds with the proposed geographic areas. Table 2 below identifies the estimated annual and daily impacts per parking space in Zones A and B based on an assumed annual rate of $6 per square metre in Zone A and $3 per square metre in Zone B. An annual rate of $6 per square metre for commercial properties within Zone A would result in an estimated annual levy of $180 per 30 m² (equivalent to approximately one parking space), or 49 cents per day per space. An annual rate of $3 per square metre for commercial properties in Zone B would have an estimated annual levy of $90 per 30m² of parking area (equivalent to approximately one parking space), or 25 cents per day. Staff feel that these rates will not have an overly negative impact on businesses, with an amount of under 50 cents per day (per 30m², equivalent to 1 parking space), applied after an automatic exemption for the first 300m2, while positively contributing to overall policy objectives and generating a significant amount of revenue for the City in support of Toronto’s path to long-term financial sustainability.</p>
<p> </p>
<p>As noted, all commercial properties used for parking will benefit from the exemption for the first 300m² of parking area from the levy. This means that properties will not pay any levy on approximately the first 10 parking spaces.</p>
<p> </p>
<p>As more information becomes available following the development of a parking inventory and/or, at a future point, through monitoring the implementation of a parking levy, the rate structure could be reviewed and adjusted, if required, to ensure alignment with existing and emerging policy objectives. Staff will continue to review as more data is collected. In addition, should the City identify possible alternative sources of revenue or be granted access to new revenue tools that that are able to grow with the economy and do not exist currently, the City can review whether a commercial parking levy continues to be appropriate.</p>
<p> </p>
<p>Table 2: Proposed Rate per Square Metre by Zone</p>
<p> </p>
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<p style="text-align: center;"><strong><span style="color: black;">Zone</span></strong></p>
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<td style="width: 96.85pt; border: solid black 1.0pt; border-left: none; background: #DEEAF6; padding: 5.75pt 5.75pt 5.75pt 5.75pt;" width="129">
<p style="text-align: center;"><strong><span style="color: black;">Annual Rate <br /> ($/m<sup>2</sup>)</span></strong></p>
</td>
<td style="width: 118.15pt; border: solid black 1.0pt; border-left: none; background: #DEEAF6; padding: 5.75pt 5.75pt 5.75pt 5.75pt;" width="158">
<p style="text-align: center;"><strong><span style="color: black;">Equivalent</span></strong></p>
<p style="text-align: center;"><strong><span style="color: black;">Estimated Annual Impact per Parking Space*</span></strong></p>
</td>
<td style="width: 118.15pt; border: solid black 1.0pt; border-left: none; background: #DEEAF6; padding: 5.75pt 5.75pt 5.75pt 5.75pt;" width="158">
<p style="text-align: center;"><strong><span style="color: black;">Equivalent Estimated Daily Impact per Parking Space</span></strong></p>
</td>
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</thead>
<tbody>
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<td style="width: 141.5pt; border: solid black 1.0pt; border-top: none; padding: 5.75pt 5.75pt 5.75pt 5.75pt;" width="189">
<p><strong><span style="color: windowtext;">Zone A</span></strong><span style="color: windowtext;"> (Downtown and Central Waterfront)</span></p>
</td>
<td style="width: 96.85pt; border-top: none; border-left: none; border-bottom: solid black 1.0pt; border-right: solid black 1.0pt; padding: 5.75pt 5.75pt 5.75pt 5.75pt;" width="129">
<p style="text-align: center;"><span style="color: windowtext;">$6.00</span></p>
</td>
<td style="width: 118.15pt; border-top: none; border-left: none; border-bottom: solid black 1.0pt; border-right: solid black 1.0pt; padding: 5.75pt 5.75pt 5.75pt 5.75pt;" width="158">
<p style="text-align: center;"><span style="color: windowtext;">$180</span></p>
</td>
<td style="width: 118.15pt; border-top: none; border-left: none; border-bottom: solid black 1.0pt; border-right: solid black 1.0pt; padding: 5.75pt 5.75pt 5.75pt 5.75pt;" width="158">
<p style="text-align: center;"><span style="color: windowtext;">$0.49</span></p>
</td>
</tr>
<tr style="page-break-inside: avoid;">
<td style="width: 141.5pt; border: solid black 1.0pt; border-top: none; padding: 5.75pt 5.75pt 5.75pt 5.75pt;" width="189">
<p><strong><span style="color: windowtext;">Zone B</span></strong><span style="color: windowtext;"> (Entire city excluding Zone A)</span></p>
</td>
<td style="width: 96.85pt; border-top: none; border-left: none; border-bottom: solid black 1.0pt; border-right: solid black 1.0pt; padding: 5.75pt 5.75pt 5.75pt 5.75pt;" width="129">
<p style="text-align: center;"><span style="color: windowtext;">$3.00</span></p>
</td>
<td style="width: 118.15pt; border-top: none; border-left: none; border-bottom: solid black 1.0pt; border-right: solid black 1.0pt; padding: 5.75pt 5.75pt 5.75pt 5.75pt;" width="158">
<p style="text-align: center;"><span style="color: windowtext;">$90</span></p>
</td>
<td style="width: 118.15pt; border-top: none; border-left: none; border-bottom: solid black 1.0pt; border-right: solid black 1.0pt; padding: 5.75pt 5.75pt 5.75pt 5.75pt;" width="158">
<p style="text-align: center;"><span style="color: windowtext;">$0.25</span></p>
</td>
</tr>
</tbody>
</table>
<p> </p>
<p>*Assumes that 1 parking space is the equivalent of 30 square metres (including a portion of access lanes, ramps and driveways). This provides the estimated impact for parking spaces beyond the first 300 square metres which will be exempt.</p>
<p> </p>
<p>Annual Revenue Potential</p>
<p> </p>
<p>Based on the estimated number of total parking spaces referenced in Table 1 above, of one million, and on the assumption a parking space is approximately equivalent to 30 square metres, in consideration of the proposed two-tiered rate structure identified in Table 2, staff estimate that the total annual revenue potential of a commercial parking levy is approximately $100 million - $150 million. Estimates for 2025 have been reflected in the City’s enhanced multi-year budget modelling introduced during the 2024 budget process.</p>
<p> </p>
<p>Table 3 below identifies gross annual revenue potential based on rate per square metre of parking area. Actual revenue estimates will be informed by the completion of the comprehensive parking inventory and will be impacted by the distribution of parking spaces across geographic areas and the application of the minimum area threshold exemption of 300m². In addition, further analysis is required to determine which properties will be exempt in accordance with existing statutory requirements.</p>
<p> </p>
<p>Table 3: Gross Annual Revenue Potential by Annual Rate per Square Metre</p>
<p> </p>
<table style="border-collapse: collapse; border: none;" width="623">
<thead>
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<td style="width: 304.55pt; border: solid black 1.0pt; background: #DEEAF6; padding: 5.75pt 5.75pt 5.75pt 5.75pt; height: 14.55pt;" width="406">
<p><strong><span style="color: black;">Annual rate per square metre of parking area</span></strong></p>
</td>
<td style="width: 54.3pt; border: solid black 1.0pt; border-left: none; background: #DEEAF6; padding: 5.75pt 5.75pt 5.75pt 5.75pt; height: 14.55pt;" width="72">
<p style="text-align: right;"><strong><span style="color: black;">$3.00</span></strong></p>
</td>
<td style="width: 54.35pt; border: solid black 1.0pt; border-left: none; background: #DEEAF6; padding: 5.75pt 5.75pt 5.75pt 5.75pt; height: 14.55pt;" width="72">
<p style="text-align: right;"><strong><span style="color: black;">$4.50</span></strong></p>
</td>
<td style="width: 54.35pt; border: solid black 1.0pt; border-left: none; background: #DEEAF6; padding: 5.75pt 5.75pt 5.75pt 5.75pt; height: 14.55pt;" width="72">
<p style="text-align: right;"><strong><span style="color: black;">$6.00</span></strong></p>
</td>
</tr>
</thead>
<tbody>
<tr style="height: 1.5pt;">
<td style="width: 304.55pt; border: solid black 1.0pt; border-top: none; padding: 5.75pt 5.75pt 5.75pt 5.75pt; height: 1.5pt;" width="406">
<p>Annual Revenue: Paid Areas Only<span style="font-size: 10.0pt;"> ($ millions)</span></p>
</td>
<td style="width: 54.3pt; border-top: none; border-left: none; border-bottom: solid black 1.0pt; border-right: solid black 1.0pt; padding: 5.75pt 5.75pt 5.75pt 5.75pt; height: 1.5pt;" width="72">
<p style="text-align: right;">13.8</p>
</td>
<td style="width: 54.35pt; border-top: none; border-left: none; border-bottom: solid black 1.0pt; border-right: solid black 1.0pt; padding: 5.75pt 5.75pt 5.75pt 5.75pt; height: 1.5pt;" width="72">
<p style="text-align: right;">20.7</p>
</td>
<td style="width: 54.35pt; border-top: none; border-left: none; border-bottom: solid black 1.0pt; border-right: solid black 1.0pt; padding: 5.75pt 5.75pt 5.75pt 5.75pt; height: 1.5pt;" width="72">
<p style="text-align: right;">27.6</p>
</td>
</tr>
<tr style="height: .85pt;">
<td style="width: 304.55pt; border: solid black 1.0pt; border-top: none; padding: 5.75pt 5.75pt 5.75pt 5.75pt; height: .85pt;" width="406">
<p>Annual Revenue: Unpaid Areas Only <span style="font-size: 10.0pt;">($ millions)</span></p>
</td>
<td style="width: 54.3pt; border-top: none; border-left: none; border-bottom: solid black 1.0pt; border-right: solid black 1.0pt; padding: 5.75pt 5.75pt 5.75pt 5.75pt; height: .85pt;" width="72">
<p style="text-align: right;">77.1</p>
</td>
<td style="width: 54.35pt; border-top: none; border-left: none; border-bottom: solid black 1.0pt; border-right: solid black 1.0pt; padding: 5.75pt 5.75pt 5.75pt 5.75pt; height: .85pt;" width="72">
<p style="text-align: right;">115.7</p>
</td>
<td style="width: 54.35pt; border-top: none; border-left: none; border-bottom: solid black 1.0pt; border-right: solid black 1.0pt; padding: 5.75pt 5.75pt 5.75pt 5.75pt; height: .85pt;" width="72">
<p style="text-align: right;">154.2</p>
</td>
</tr>
<tr style="height: .85pt;">
<td style="width: 304.55pt; border: solid black 1.0pt; border-top: none; background: #EDEDED; padding: 5.75pt 5.75pt 5.75pt 5.75pt; height: .85pt;" width="406">
<p><strong>Annual Revenue: Paid and Unpaid Areas </strong><span style="font-size: 10.0pt;">($ millions)</span></p>
</td>
<td style="width: 54.3pt; border-top: none; border-left: none; border-bottom: solid black 1.0pt; border-right: solid black 1.0pt; background: #EDEDED; padding: 5.75pt 5.75pt 5.75pt 5.75pt; height: .85pt;" width="72">
<p style="text-align: right;"><strong>90.9</strong></p>
</td>
<td style="width: 54.35pt; border-top: none; border-left: none; border-bottom: solid black 1.0pt; border-right: solid black 1.0pt; background: #EDEDED; padding: 5.75pt 5.75pt 5.75pt 5.75pt; height: .85pt;" width="72">
<p style="text-align: right;"><strong>136.4</strong></p>
</td>
<td style="width: 54.35pt; border-top: none; border-left: none; border-bottom: solid black 1.0pt; border-right: solid black 1.0pt; background: #EDEDED; padding: 5.75pt 5.75pt 5.75pt 5.75pt; height: .85pt;" width="72">
<p style="text-align: right;"><strong>181.8</strong></p>
</td>
</tr>
</tbody>
</table>
<p><br /> As revenue estimates are further refined, staff can validate estimates included in enhanced multi-year budget modelling introduced in the 2024 budget, where annual commercial parking levy revenue generated in 2025 and future years is intended to offset one-time bridging actions applied to the 2024 budget that enabled critical investments in transit services.</p>
<p> </p>
<p>Financial Impact to Commercial Properties<br /> <br /> As referenced in Table 2 above, 30m² or the equivalent of one parking space, will result in an estimated daily rate ranging from 25 cents to 49 cents, depending on where the property is located. This equates to an annual rate of $90 to $180 per 30m² (approximately the equivalent to one parking space).</p>
<p><br /> Table 4 below illustrates how a commercial parking levy may impact different commercial property types using 2022 property tax estimates. Note that these amounts include the first 300m² in parking area as exempt from the levy.</p>
<p> </p>
<p>Overall, it is expected that approximately 23,000 commercial properties would be subject to the parking levy. In consideration of the total one million parking spaces in the City as identified above, it is estimated than an average impact to a business with 43 parking spaces (approximately 1,290 square metres of parking area) would result in a total annual levy amount of $2,970 to $5,940 depending on where in the City it is located. For properties which contain multiple tenants, the individual impacts to units will be even less.</p>
<p><br /> Table 4: Illustrative Example of an Annual Levy by Commercial Property Types</p>
<p> </p>
<table style="border-collapse: collapse; border: none;">
<thead>
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<p style="text-align: center;"><strong>Commercial Property Type</strong></p>
</td>
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<p style="text-align: center;"><strong>Parking Area</strong></p>
</td>
<td style="width: 77.95pt; border: solid black 1.0pt; border-left: none; background: #DEEAF6; padding: 5.75pt 5.75pt 5.75pt 5.75pt;" width="104">
<p style="text-align: center;"><strong>Property Tax (2022)</strong></p>
</td>
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<p style="text-align: center;"><strong>Zone A – Annual Rate*</strong></p>
<p style="text-align: center;"><strong>$6 / m</strong><strong>²</strong></p>
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<p style="text-align: center;"><strong>Zone B – <br /> Annual Rate*</strong></p>
<p style="text-align: center;"><strong>$3 / m</strong><strong>²</strong></p>
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<p>Large Shopping Centre</p>
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<p>144,000m<sup>2</sup></p>
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<p style="text-align: right;">$4.4 million</p>
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<p style="text-align: right;">$862,200</p>
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<p style="text-align: right;">$431,100</p>
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<p>Large Office Building</p>
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<p>42,600m<sup>2</sup></p>
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<p style="text-align: right;">$20 million</p>
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<p style="text-align: right;">$253,800</p>
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<p style="text-align: right;">$126,900</p>
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<p>Neighbourhood Shopping Centre</p>
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<p>4,800m<sup>2</sup></p>
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<p style="text-align: right;">$50,000</p>
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<p style="text-align: right;">$27,000</p>
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<p style="text-align: right;">$13,500</p>
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<p>Local Grocery Store</p>
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<p>1,200m<sup>2</sup></p>
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<p style="text-align: right;">$160,000</p>
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<p style="text-align: right;">$5,400</p>
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<p style="text-align: right;">$2,700</p>
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<p>Small Medical / Legal Office Building</p>
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<p>360m<sup>2</sup></p>
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<p style="text-align: right;">$70,000</p>
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<p style="text-align: right;">$360</p>
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<p style="text-align: right;">$180</p>
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<p>*Incorporates exemption of first 300m² in parking area</p>
<p> </p>
<p>Estimated Implementation Costs</p>
<p> </p>
<p>It is expected that the total cost to develop and implement the commercial parking levy will be between $7.2 and $12.2 million based on approximately 23,000 commercial properties that would be subject to the levy. These one-time costs include:</p>
<p><br />· Internal services, such as legal, policy, I&T start-up development and programming, which may be accommodated in existing budgets through prioritization of this work.;</p>
<p>· Materials and equipment, such as notifications and mailings to properties, and equipment for in-field data measurement, capture and upload to billing system; and</p>
<p>· Development and verification of a parking inventory, which may include City staffing and expenditures, or support by an external service provider.</p>
<p> </p>
<p>In addition, the commercial parking levy will be subject to annual ongoing program administration costs, estimated to be $1.3 million per year, including:</p>
<p><br />· Salaries and benefits for staff resources; and</p>
<p>· Materials and equipment.</p>
<p> </p>
<p>It is recommended that, should the City require third-party support to conduct a comprehensive parking inventory in 2024, that a one-time withdrawal from the Tax Rate Stabilization Reserve Fund be authorized within the 2024 Operating Budget for Non-Program, with the amount in the reserve fund to be replenished from future revenues generated by the commercial parking levy, subject to implementation. Annual ongoing costs associated with the administration of the commercial parking levy can be fully recovered through the revenue generated.</p> | <p>At its meeting on September 6, 2023, as part of Item EX7.1: Updated Long-Term Financial Plan (LTFP), City Council directed staff to report back on the development of a levy on commercial parking within the City. It was requested that the report outline a recommended tax, collection and enforcement design, estimated revenues, and required timelines for implementation in 2025.</p>
<p> </p>
<p>This report identifies and seeks Council’s endorsement on the guiding design principles of a commercial parking levy and provides information that responds to Council’s requests. Following the consideration of this report, staff will undertake the development of a comprehensive parking inventory and conduct additional engagement with stakeholders to further refine and finalize implementation plans, and report back with a status update in advance of the 2025 budget process.</p>
<p> </p>
<p>To develop overall design principles, City staff engaged a third-party consultant, Access Planning Ltd., to advise on how to best advance a commercial parking levy, based on their previous experience and expertise in a related file in Vancouver. Access concluded that a commercial parking levy has sufficient policy and revenue rationale to introduce within Toronto and recommended keeping the rules and applicability of the parking levy as simple as possible during the launch. As the City collects more information on the economic and social impacts of the levy, further refinements to the program may be considered to optimize policy objectives.</p>
<p> </p>
<p>As a result of this research, staff are recommending the following parking levy design principles in the application of a commercial parking levy:</p>
<p> </p>
<p style="padding-left: 30px;">1. Apply a commercial off-street parking levy to the entire City of Toronto;</p>
<p style="padding-left: 30px;"><br />2. Include both private and publicly owned or operated commercial properties;</p>
<p style="padding-left: 30px;"><br />3. Include both unpaid and fee-paid parking facilities including surface parking, underground parking and parking garages;</p>
<p style="padding-left: 30px;"><br />4. Include a minimum area threshold, which provides an automatic exemption for the first 300m2 for all properties (equivalent to approximately 10 parking spaces) to reduce the burden of the levy on small businesses; and</p>
<p style="padding-left: 30px;"><br />5. Apply a two-zone rate structure based on geographic area:</p>
<p style="padding-left: 60px;">a. Zone A – Downtown & Central Waterfront</p>
<p style="padding-left: 60px;">b. Zone B – Entire City of Toronto, excluding Zone A.</p>
<p> </p>
<p>The proposed parking levy will apply to properties within the Commercial tax class, and the levy will be calculated based on the total areal extent of the property that is used for parking multiplied by a per-square metre rate. An exemption from the levy will apply for the first 300 square metres for all properties. In addition to the mandatory statutory exemptions from taxation established under Section 268 of the City of Toronto Act, it is recommended that the property tax exemptions of Section 3 of the Assessment Act also apply for various property types. Staff are also recommending refining the definition of “parking area” to exclude certain situations where parking is directly associated with a business use, e.g., vehicle storage for certain commercial operations, as explained later in the report.</p>
<p> </p>
<p>The effectiveness of billing and collecting a parking levy will rely on the City's ability to develop and maintain an accurate inventory of parking areas. As a next step, staff will continue to identify opportunities to compile this information using a combination of approaches and multiple data sources, as there is no single source of information available at this time. This may include geographic data, on-site inspections, data from the Municipal Property Assessment Corporation (MPAC), and owner-supplied information through self-reporting. As part of this report, staff are seeking authorization to engage with third-party resources, as required, to successfully complete the development of a parking inventory. Staff have previously advised that it may take up to 12-18 months to develop the inventory, modify billing systems, complete testing, and notify all commercial property owners in advance of implementation.</p>
<p> </p>
<p>Implementation of a commercial parking levy is expected to impact stakeholders and economic and business activities. Following Council’s endorsement of the overarching design principles identified in this report, staff will further engage with the industry on potential impacts. Overall, the introduction of a parking levy is expected to have a positive impact on City priorities and objectives, including reducing congestion and positively contributing to climate action by encouraging Torontonians to use transit or other means to travel. The parking levy will also positively contribute to the City’s multi-year budgeting strategy and long-term financial sustainability. Preliminary estimates based on the proposed design principles indicate the City may generate gross revenues from $100 million to $150 million annually. These estimates have been reflected in the City’s enhanced multi-year budget modelling introduced in 2024 and are intended to offset one-time bridging actions applied to the 2024 budget that enabled critical investments in transit services.</p> | 12 | 3 | CMMTTEE | EX | All | N | … | Report | ACTION | Referred | Main | Committee | … | … | … | … | … | … | … | … | … | … | … | Decision information not found | false | Referred | … | … | … | … | — | — |